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Entrepreneurs are known for keeping a keen eye on the bottom line. From monitoring cash flow to buying inventory, accountants advise their clients that every cent matters. Unfortunately, busy schedules and multi-tasking may prevent small business owners from knowing about savings benefits. If you run a shop, the following incentives could reap much-needed dividends. 

4 Ways Small Business Owners Can Save

1. Enlist Relatives as Employees

Consider hiring family members to help operate your business. Doing so may mean you can take a tax deduction called reasonable compensation that can reduce your taxable income. In addition, you might not have to pay Federal Income Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) taxes if you hire relatives.  

2. Keep Old Equipment

Thoseaccountant ink-jet printers and fax machines you no longer use could still be worth something. IRS Section 1231 outlines whether your equipment is tax-deductible. An accountant can determine if it’s more beneficial to sell the items or abandon the equipment.

3. Use Carryovers

Certain tax credits and deductions may be carried over to the following tax season. You could be eligible to shelve home office expenses and business losses for future savings. Talk to an accountant about which deductions and credits can carry over. It’s also helpful to keep a list of eligible items so that you’re prepared when filing future business tax returns. 

4. Give Stocks to Charity

Get the most from your charitable donations by giving stocks instead. When you contribute, you deduct the stock’s value at the time of donation. This can be significantly more than the stock’s amount when you initially purchased it. 

 

 

For nearly 20 years, Tudor Wilson & Associates, CPAs, LLC in Honolulu, HI, has provided expert tax return services to small business owners. Their team of accountants work with companies from a variety of industries, so you can count on them for customized expertise. They also specialize in helping entrepreneurs take advantage of all eligible tax deductions and credits. To learn more about how the firm can help your business, call (808) 592-2000, or visit their website for information on their full lineup of services.

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